What does that mean for the Halo franchise? Will Microsoft look to other developers for the next Halo game, or do they have an exclusive deal with Bungie? Is it even remotely possible that we’ll finally see the release ofHalo DS? Probably not since MS owns the Halo IP, but one can dream.

Bungie quote: “This exciting evolution of our relationship with Microsoft will enable us to expand both creatively and organizationally in our mission to create world-class games,� said Harold Ryan, studio head for Bungie. “We will continue to develop with our primary focus on Microsoft’s platforms; we greatly value our mutually prosperous relationship with our publisher, Microsoft Game Studios, and we look forward to continuing that affiliation through ‘Halo’ and beyond.�

Microsoft quote: “Our collaboration with Bungie has resulted in ‘Halo’ becoming an enduring mainstream hit,� said Shane Kim, corporate vice president of Microsoft Game Studios. “While we are supporting Bungie’s desire to return to its independent roots, we will continue to invest in our ‘Halo’ entertainment property with Bungie and other partners, such as Peter Jackson, on a new interactive series set in the ‘Halo’ universe. We look forward to great success with Bungie as our long-term relationship continues to evolve through ‘Halo’-related titles and new IP created by Bungie.�

Official Bungie press release:

Bungie Studios Becomes Privately Held Independent Company

Bungie and Microsoft forge new long-term relationship.

KIRKLAND, Wash. — Oct. 5, 2007 — Bungie and Microsoft Corp. today announced a plan for Bungie Studios, the developers of Microsoft’s “Halo� franchise, to become a privately held independent company, Bungie, LLC, in which Microsoft will hold a minority equity interest. As part of this transaction, Bungie and Microsoft have forged a deep and long-term development and publishing relationship focused on the continued success of the “Halo� franchise. It is also the intent of both parties to expand their partnership to include new IP created and owned by Bungie.

Bungie’s critically acclaimed Xbox 360® exclusive “Halo 3� achieved $300 million in global sales in its first week. Released on Tuesday, Sept. 25, “Halo 3� is the fastest-selling video game ever and already one of the most successful entertainment properties in history.

“This exciting evolution of our relationship with Microsoft will enable us to expand both creatively and organizationally in our mission to create world-class games,� said Harold Ryan, studio head for Bungie. “We will continue to develop with our primary focus on Microsoft’s platforms; we greatly value our mutually prosperous relationship with our publisher, Microsoft Game Studios, and we look forward to continuing that affiliation through ‘Halo’ and beyond.�

“Working with Microsoft was great for us, it allowed us to grow as a team and make the ambitious, blockbuster games we all wanted to work on. And they will continue to be a great partner. But Bungie is like a shark. We have to keep moving to survive. We have to continually test ourselves, or we might as well be dolphins. Or manatees,� said Jason Jones, Bungie founder and partner.

Bungie’s management retained the services of Don Leeds, senior managing director of B-Hive Global, LLC, to assist in the structuring of the deal and negotiating on their behalf. Bungie will remain in Kirkland, Washington, and is always looking to hire excellent talent.

About Bungie

Bungie was founded in 1991 with two goals: to develop games that combine brilliant technology, beautiful art, intelligent stories and deep gameplay, and to sell enough of those games to achieve its real goal of total world domination. Over the past 10 years it has produced games such as the “Marathon� trilogy and the first two “Myth� games, hailed as classics by critics and gamers around the world. Bungie’s “Halo� franchise is an international award-winning action title that has grown into a global entertainment phenomenon, selling more than 18 million units worldwide, logging billions of hours of multiplayer action on Xbox LIVE®, and spawning action figures, books, graphic novels, soundtracks, apparel and more. The critically acclaimed “Halo 3�, released on Tuesday, Sept. 25th 2007, is the fastest-selling video game ever, achieving $300 million in global sales its first week, making it one of the most successful entertainment properties in history. More information on Bungie can be found at http://www.bungie.net.

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Official Microsoft press release

Microsoft and Bungie Studios to Evolve Relationship

Companies to forge new long-term relationship.

REDMOND, Wash. — Oct. 5, 2007 — Microsoft Corp. today announced a plan for Bungie Studios, the developers of the “Halo®� franchise, to embark on a path to become an independent company. Microsoft will retain an equity interest in Bungie, at the same time continuing its long-standing publishing agreement between Microsoft Game Studios and Bungie for the Microsoft-owned “Halo� intellectual property as well as other future properties developed by Bungie.

The critically acclaimed Xbox 360®-exclusive “Halo 3� achieved $300 million in global sales in its first week. Released on Tuesday, Sept. 25, “Halo 3� is the fastest-selling video game ever and already one of the most successful entertainment properties in history.

“Our collaboration with Bungie has resulted in ‘Halo’ becoming an enduring mainstream hit,� said Shane Kim, corporate vice president of Microsoft Game Studios. “While we are supporting Bungie’s desire to return to its independent roots, we will continue to invest in our ‘Halo’ entertainment property with Bungie and other partners, such as Peter Jackson, on a new interactive series set in the ‘Halo’ universe. We look forward to great success with Bungie as our long-term relationship continues to evolve through ‘Halo’-related titles and new IP created by Bungie.�

“This exciting evolution of our relationship with Microsoft will enable us to expand both creatively and organizationally in our mission to create world-class games,� said Harold Ryan, studio head for Bungie. “We will continue to develop with our primary focus on Microsoft® platforms; we greatly value our mutually prosperous relationship with our publisher, Microsoft Game Studios; and we look forward to continuing that affiliation through ‘Halo’ and beyond.�

Bungie Studios will remain in its current location in Kirkland, Wash.

About Bungie Studios

Bungie Studios was founded in 1991 with two goals: to develop games that combine brilliant technology, beautiful art, intelligent stories and deep gameplay, and then sell enough of those games to achieve its real goal of total world domination. Over the past 10 years it has produced games such as the “Marathon� trilogy and the first two “Myth� games, hailed as classics by critics and gamers around the world. Bungie’s “Halo� franchise is an international award-winning action title that has grown into a global entertainment phenomenon, selling more than 14.8 million units worldwide, logging nearly 1 billion hours of multiplayer action on Xbox LIVE®, and spawning action figures, books, a graphic novel, apparel and more. Bungie released “Halo 3� on Sept. 25, 2007 to universal critical acclaim, and first day US sales of over $170 million, making it the biggest opening day in entertainment history. More information on Bungie can be found at http://www.bungie.net.

About Microsoft Game Studios

Microsoft Game Studios is a leading worldwide publisher and developer of games for the Xbox and Xbox 360 video game systems, the Windows® operating system and online platforms. Comprising a network of top developers, Microsoft Game Studios is committed to creating innovative and diverse games for Windows (http://www.microsoft.com/games), including such franchises as “Age of Empires®,� “Flight Simulator� and “Zoo Tycoon®�; Xbox and Xbox 360 (http://www.xbox.com), including such games as “Gears of War� and franchises such as “Halo,� “Fable®,� “Project Gotham Racing®� and “Forza Motorsport®�; and MSN® Games (http://www.games.msn.com), the official games channel for the MSN network and home to such hits as “Bejeweled� and “Hexic®

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT�) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.

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#1 – Play a lot of Halo 2. Play at least 3 hours of Halo 2 multiplayer between Feb. 1, 2007, at 12:01 a.m. EST and Feb. 3, 2007, at 11:59 p.m. EST. You also need to be among the first 13,333 to register at http://www.halo3.com.

#2 – Purchase “Crackdownâ€? when it hits store shelves. Once the Halo 3 multiplayer beta is available, you just need to use your “Crackdown” disc as a key to be able to download Halo 3 and join in the beta.

Official Press Release:

Jan. 3, 2007

Microsoft Announces Two Additional Paths of Entry to “Halo 3� Multiplayer Beta

Gamers are invited to join the fight when the beta goes live this spring with Xbox Live and “Crackdown� providing the final two paths.

Microsoft Game Studios and Bungie Studios are ringing in the year with a proverbial bang, as they announced today two new ways for gamers to receive an invitation to participate in the “Halo® 3� multiplayer beta program coming this spring through Xbox Live® Marketplace.

Specifically, gamers will be able to receive an invitation by doing one of the following:

· Qualifying over Xbox Live and then being one of the first 13,333 “Halo 2� gamers to register for the “Rule of Three� program at http://www.halo3.com in early February

· Purchasing the upcoming game “Crackdown™,� which hits store shelves in the U.S. on Feb. 20

The “Halo 3� multiplayer beta, which is a pre-release version of the multiplayer experience of “Halo 3,� is scheduled for availability in spring 2007 exclusively on Xbox 360™. The beta also represents an opportunity for gamers to participate in the testing and refinement of the multiplayer gameplay of “Halo 3,� the most anticipated game of 2007. Through the resulting feedback, Bungie Studios will be able to further hone the end result of “Halo 3.�

Beginning Thursday, Feb. 1, 2007, at 12:01 a.m. EST, all gamers need to do is participate in at least three hours of “Halo 2� multiplayer sessions, via Xbox Live, before Feb. 3, 2007, at 11:59 p.m. EST and then be among the first 13,333 to register at http://www.halo3.com. The “Rule of Three� program is currently planned for gamers in the 50 United States (includes District of Columbia) age 17 years and older who have access to an Xbox 360 Pro console or an Xbox 360 Core console with hard drive, a valid Xbox Live Gold subscription and the “Halo 2� game. Gamers around the world are encouraged to visit http://www.halo3.com in the coming weeks for more information on the “Rule of Three� program in their region.

As well, when “Crackdown� hits store shelves, gamers eager to take home a copy of the highly anticipated exclusive action title for Xbox 360 will find marked boxes of “Crackdown� that include an invite to participate in the coveted “Halo 3� multiplayer beta program when it becomes available. When the “Halo 3� multiplayer beta surfaces in spring 2007, owners of “Crackdown� with access to an Xbox 360 Pro console or an Xbox 360 Core console with hard drive and a valid Xbox Live Gold subscription simply need to load their copy of “Crackdown� into Xbox 360 and use the disc as a key to download the beta from Xbox Live Marketplace and join the battle in “Halo 3� multiplayer. “Crackdown� will be available in the U.S. on Feb. 20, Asian territories on Feb. 22 and European markets on Feb. 23.

In December, Microsoft Game Studios and Bungie Studios completed the first of three ways for North American gamers to participate in the “Halo 3� multiplayer beta, by registering at http://www.halo3.com. Gamers who were selected from this initial opportunity will be contacted in January.

From Realtime Worlds, “Crackdown� pushes the action-driving hybrid genre into the next generation with a rich and immersive 3-D playground. Gamers level up their Agent’s strength, agility, firearms, explosives and driving skills while scaling the fully vertical world of “Crackdown.� This M-rated game incorporates revolutionary co-op gameplay throughout the entire free-form campaign. Creating a volatile cocktail of judicial oppression, players will clean up the streets of a truly interactive world when “Crackdown� hits store shelves at an estimated retail price of $59.99.

The 60 second Halo 3 teaser/trailer from Bungie which aired tonight on ESPN will be available for download later tonight on the Xbox Live Marketplace.

Exclusive “Halo 3� Trailer Makes Broadcast Debut – Viewers to See Master Chief Like He’s Never Been Seen Before

Fans worldwide can experience a thrilling look at the most anticipated game of 2007 with a special 60-second “Halo 3� trailer; Microsoft announces first chance for North American gamers to participate in the Halo 3 Multiplayer Beta by entering at Halo3.com

Humanity is about to experience another exciting look at the world of “Halo 3,� one of the most anticipated entertainment launches for 2007. Airing in North America, Monday, Dec. 4 on ESPN’s Monday Night Football and Xbox.com in Europe, the new 60-second “Halo 3� trailer will offer viewers an exclusive look at the iconic “Halo� universe and provide telling, new hints as to what Bungie Studios has in store for the highly regarded game, which is published by Microsoft Game Studios and exclusive to Xbox 360.

Fans can tune in to ESPN on Monday, Dec. 4 between 5:50 and 6:20 p.m. PST to catch this stunning new look at “Halo 3.� Additionally, the ad will be aired that same evening on Xbox.com at 8 p.m. PST /04.00 GMT/05.00 CET (Tuesday, Dec. 5).

The ad, created by McCann Worldgroup San Francisco, includes a mixture of live action and computer generated animation, will air one time only and will then be made available online worldwide through Xbox Live Marketplace and Xbox.com.

“Halo is a pop culture phenomenon! The Halo franchise has changed the face of interactive entertainment and it’s only fitting that we take an innovative approach to how we market and advertise the brand,” said Jeff Bell, corporate vice president of global marketing for the Interactive Entertainment Business at Microsoft Corp. “This invites a new audience with a rich back story, and continues to galvanize gamers around the world for the launch of Halo 3 in 2007.â€?

In conjunction with the ad, Microsoft today unveiled further details and an official call to entry for the “Halo 3� beta program. Beginning Monday, Dec. 4, by visiting http://www.halo3.com, gamers in North America will be able to register for the opportunity to be one of the select members to join the unprecedented “Halo 3� public beta program, scheduled to kick off in spring 2007. Today’s announcement confirms the first path of entry for gamers to participate in the beta program and be among the first to experience the most anticipated game of 2007.

The Xbox Live multiplayer public beta, which is a pre-release version of the multiplayer experience of “Halo 3,� is scheduled for availability in spring 2007 exclusively on Xbox 360. This beta also represents an opportunity for gamers to participate in the development of “Halo 3.� Through the resulting feedback, Bungie Studios will be able to further refine and hone the end result of “Halo 3.�

Unveiled earlier this year at the Electronic Entertainment Expo in Los Angeles, “Halo 3� represents the third chapter in the “Halo� trilogy, an international award-winning action series that grew into a global entertainment phenomenon, selling more than 14.7 million units worldwide, which equals nearly $700 million in sales, and logging in excess of 800 million hours of multiplayer action on Xbox Live.